Carlyle Group Joins Thai Billionaire’s Bid for Hutchison’s ParknShop

HONG KONG—Carlyle Group LP has joined Thai billionaire Dhanin Chearavanon’s bid for Hong Kong supermarket chain ParknShop in a deal that could fetch as much as US$4 billion.

The Washington, D.C.-based private-equity firm and Mr. Dhanin’s Charoen Pokphand Group have hired Citigroup Inc. and UBS AG to advise them on the bid, people with direct knowledge of the deal said Tuesday. One of the people said that Carlyle joined the Thai bid over the past two weeks.

Charoen Pokphand, an agribusiness, was one of four bidders still in the running for ParknShop after eight applicants submitted bids by mid-August, other people with knowledge of the deal said last month. The other prospective bidders are Australian supermarket operator Woolworths Ltd., Chinese supermarket chain China Resources Enterprise Ltd. and Japanese department-store operator Aeon Co.

Hutchison Whampoa, controlled by Asia’s richest man, Li Ka-shing, launched the sale of the supermarket chain—one of two that share a duopoly in Hong Kong; the other is Wellcome, part of conglomerate Jardine Matheson Holdings Ltd.–in June, seeking to fetch US$3 billion to US$4 billion.

By buying ParknShop, Mr. Dhanin, whose companies account for a quarter of China’s poultry exports, can get access to a cash-rich grocery chain with a presence that extends into China. This can augment Charoen Pokphand’s existing shopping mall and supermarkets in China and extends the Thai group’s acquisition spree this year. It spent more than US$15 billion in the space of a few months this year to acquire Thai discount wholesaler Siam Makro PCL and a 15% stake in China’s Ping An Insurance Group.

Carlyle has been an active investor in China, with one in 12 of its employees based there. The private-equity firm has had dealings with Charoen Pokphand Group in the past. It bought a stake in the Thai company’s Chinese animal feed processor for $175 million in 2010.

ParknShop has a 19% share of Hong Kong’s fresh-food and consumer goods market, according to Nielsen Homescan. Wellcome has 15%.

Mr. Li is selling ParknShop as he expands his reach in Europe, where he has spent billions of dollars in recent years buying telecommunications firms in Ireland and Austria as well as utility companies in the United Kingdom.

He is exiting a company that while profitable, is grappling with a mature market in Hong Kong, which accounted for more than 80% of its revenue last year. ParknShop recorded earnings before interest, tax, depreciation and amortization of around 1.4 billion Hong Kong dollars (US$180 million) last year, one of the people said.

Sales growth in the supermarket industry in Hong Kong slowed to 7.9% in the first half of this year from 10.5% for last year and 12.5% in 2011, according to government statistics.

Goldman Sachs Group Inc. and Bank of America Merrill Lynch are handling the ParknShop sale.

–Kana Inagaki in Tokyo and Warangkana Chomchuen in Bangkok contributed to this article.